Analysts of deep cyclicals, industrials, commodities would be very familiar with these terms. These terms are invented by the financial industry to try to help analysts analyze real businesses from their desktops, in plush offices, hundreds or thousands of miles away from where the businesses actually took place. It bears little resemblance of how real ops managers actually thought about their costs or how businesses actually operated.

All-in costs refer to all the costs that is needed to start and ramp up a business. Take the example of a gold mine, the all-in cost today for digging up an ounce of gold is supposedly $1,000. Today gold trades at $1,100 per ounce. So if gold falls below $1,000, then new gold production should stop since no one would spend $1,100 to dig something and then sell it for $1,000 right?

But wait, all in costs involved sunk cost like ...